Commerce, She is a Changin’

August 9th, 2018

An overview of the many different commerce solutions available.

As many technologies enter commerce as digital payment methods, payment companies are attempting to reach a very diverse userbase. Aside from the credit cards that most people are familiar with, we’re now seeing Apple Pay, Google Pay, PayPal Pay, emerge as ways to pay for the things we want, as well as some fairly new options.

Venmo, for example, is an acquisition of PayPal and has emerged to fill in a gap of the current payment environment – paying your friends and contacts. Venmo does offer an option for businesses to take payment, but the platform’s slogan summarizes the vision succinctly: “Download to pay, split and share.” The strength in the app lies in the ability to split costs with other users, whether it be dinner, rent or anything else.

Cryptocurrencies, predominantly Bitcoin, are also joining more common payment methods in the e-commerce realm. Where other payment platforms are based on government-backed currency, cryptocurrencies are much less stable. Since its release in 2009, Bitcoin reached a value of nearly $20,000 per coin in December of 2017. Leading up to this peak, businesses started adopting Bitcoin as a payment method with the hope that accepting payments of Bitcoin would be worth more after the transaction. As the price of Bitcoin rose, the cost to exchange Bitcoin for government-backed currency also was increasing.

By mid-December in 2017, popular video game distributor Steam announced that they were no longer accepting Bitcoin as payment for the games on their platform. When Steam started offering Bitcoin as payment, they were paying $.20 per transaction. At the time of removing the cryptocurrency from their platform, a single transaction was nearing $20.

From December 17th to December 22nd of 2017, Bitcoin lost 30% of its value, ending around $14,000. By the middle of May 2018, Bitcoin had fallen to below $9,000 per coin. This volatility has lead to numerous companies, including Reddit, Stripe and Microsoft, to drop Bitcoin as a payment method.

Though cryptocurrencies may not have a stable enough price to justify widespread adoption across e-commerce solutions, Apple, Google, PayPal and Stripe do offer excellent solutions to simplify paying digitally. And, of course, there is another option that just isn’t possible with digital commerce solutions: cash.

According to the Federal Reserve – which admits that, someday, we may no longer need a physical currency – cash is still very important in our economy. According to a study conducted by the Federal Reserve, one-third of an average consumer’s monthly transactions have a total of $10 or less, and the average consumer uses cash for two-thirds of these transactions. For transactions less than $50, consumers will use cash half of the time.

As more and more options become available for consumers, it’s important to note that businesses do not necessarily have to just have one offering for their customers. The previously mentioned payment solution, Stripe, allows payment with most major credit cards, Apple and Google Pay platforms, as well as several additional solutions. It is up to businesses to incorporate as many or as few solutions as they want to accommodate their customers.